On October 23rd, 2001, the
NEPAD was officially formalized here in Abuja. Can you tell
us what have been its main achievements in those two years
it has been functioning?
I think the best way to illustrate the achievements
of NEPAD would be to briefly examine the problems confronting
Africa and the rationale behind the creation of NEPAD. At
the turn of the new century, that is, in the beginning of
this millennium, there was a lot of brainstorming both in
and outside Africa which clearly revealed that the continent
was lagging behind the rest of the world. Although by 2000,
Africa had 12% of the population of the world, nevertheless,
it accounted for 7% of the Gross Domestic Product of the
whole world; by contrast the United States accounted for
25%. Africa
also accounted for less than 1% of the total foreign direct
investment; less than 2% of the total trade and less than
2% of the total export. At the same time, it accounted for
75% of the people infected by HIV/AIDS worldwide. The region
was just at the bottom of the ladder. The situation was so
bad that African leaders thought it was necessary to initiate
a comprehensive recovery programme so that Africans could
claim the 21st century. They couldn't just continue with
the
unacceptable situation. That was the same feeling among the
leaders of the developed world. This was the rationale behind
the creation of NEPAD.
NEPAD could be described as the collective
vision of African leaders to address all of the problems
of underdevelopment
as manifested in the statistics quoted above. And of course,
a vision is a mental picture of a better future. So really,
the leaders contrived NEPAD as the way out of these problems
believing that if they all worked together - the 53 member
nations of the African Union - they would be able perhaps
to effect more changes than if they approached those problems
individually because many of the problems confronting Africa
at the beginning of the millennium were common to all. If
they can all come together and sing from the same hymn
book, it would be easier for them to address their problems
and
get solutions than approaching them individually.
Could you tell us what is/are the key plan(s) of NEPAD
for Africa
The goals of NEPAD briefly are the following:
one, to restore peace and security. The logical starting
point was for
peace
and security. At the beginning of the millennium, one out
of five Africans was living under armed conflict and of
course
that would not create a conducive environment for investment,
growth and sustainable development. So, peace and security
is
the starting point. Next, there must be good governance.
We must entrench good governance in all ramifications -
political
good governance, economic good governance and corporate good
governance. Thirdly, there must be eradication of poverty
or
say alleviation of widespread poverty in Africa. We must
also close the income gap between the rich and the poor
which was
too huge in Africa. Another goal is to reduce the marginalization
of Africa in the process of globalisation. About the same
time,
the leaders of the industrial countries of the North, the
G8 countries in particular, thought there was something
to be done
to help Africa. So, African leaders met with them first in
Tokyo, Japan in the year 2000. It was agreed that the African
leaders
should draw up their own plan for the continent. They eventually
came up with the document that is called the NEPAD document.
The African leaders met the G8 leaders again in Genoa,
Italy
in 2001. The G8 accepted the document and formed their own
group of experts on Africa to work further on how best
to support
NEPAD.
In 2002, during the summit of the G8 in Kananaskis , Canada,
the G8 adopted the Plan of Action to support NEPAD. The support
of the G8 had been very critical right from the beginning.
The United Nations too saw NEPAD as a timely initiative to
tag onto. So African leaders were able to secure the support
of the UN and the industrialized countries. Currently, the
United Nations has an office under the Secretary General
in
charge of NEPAD. Thus, the United Nations now has given
its full backing. The General Assembly met in the year 2002,
debated
NEPAD for about a week and they came up with a resolution
fully supporting NEPAD. Africa and African issues suddenly
have become very prominent on the global stage and this is
attributable to the whole new awareness created by NEPAD.
What is the position of NEPAD in regards to trade, the
WTO and the initiative to boost intra-African trade?
One
of the areas of concern under NEPAD is market access. Market
access in the sense that there are too many obstacles,
barriers,
tariffs and non-tariffs in the way of African products in
the industrial economies. The total of farm subsidies for
OECD countries
is about 350 billion dollars a year. This actually is about
seven times the total of official development assistance
(ODA).
This situation creates problems for African products. So,
what NEPAD seeks to do in the WTO is to call on the leaders
of the
industrial countries to open up and remove obstacles, especially
the farm subsidies. For example, the African farmer is
known
to be perhaps more competitive in producing cotton but with
US subsidising its farmers, the African farmer becomes
less
competitive. So in effect, subsidising the US cotton producer
is subsidizing poverty in Africa indirectly. This is one
of
the areas where NEPAD is becoming very useful. This is why
I said the sense in NEPAD is that all African countries
are coming
together to address their problems collectively. If individually,
each of the 53 members go to France or the US, they will
not
be able to make as much impact. One of the things NEPAD has
gained for Africa is enhanced advocacy. Enhanced advocacy
to
bring about effective change in the policies, actions and
programmes of the OECD countries. Examples are debt remission,
official
development assistance and market access.
Look at debt remission. We are in a situation
in Africa now where the debt that we owe is fiscally unsustainable.
I give
you as an example Nigeria: Nigeria borrowed 12.5 billion
dollars
from the Paris Club members. We have paid back over the
years 17.5 billion dollars. Currently we still owe the
Paris Club
members nothing less than 26 billion dollars. That is
a classic example of the African debt situation not being
fiscally
sustainable.
Increasingly, it is realised that creditors ignore African
debtors because they have little nuisance value compared
with
countries which had been granted generous relief in the
past.
With NEPAD we can also achieve enhanced
partnership which is also very important. In the last four
decades, between
1960 and 2000, when most African countries became independent,
there were partnerships between African countries and
industrial countries but it was a state of dependency. We
want it
to
become enhanced partnership with clearly defined mutual
benefits, obligations and responsibilities on both sides.
African leaders
are committed, on our own side to restore peace and security,
eradicate poverty, close the gap between the rich and
the poor and entrench good governance. Our leaders want to
ensure
that we do things right in order to reduce our dependence
on the outside world. The industrial countries too have
accepted
their own obligations, which are embodied in the Kananaski's
Action Plan. This is a different type of partnership
compared
to what we experienced in the first four decades of independence
when we were dependent. In the days of the cold war,
we became
victims of both the East and the West, we thought we
were the darling of everybody, but it was not the case. Now
we
know better.
NEPAD has recorded impressive
improvement towards restoring peace and security in Africa.
For instance, take a look
at
the situation in Liberia, it was President Obasanjo from
Nigeria, President Mbeki from South Africa and President
Chissano from
Mozambique who convinced President Charles Taylor to
leave. This had never happened before in Africa. In the case
of
Burundi
at present, there are in that country, troops from South
Africa, Ethiopia and Mozambique, even as poor as those
two last countries
are. This was not the case before. In the Great Lake
region, we have seen also peace initiatives in the Democratic
Republic
of Congo and Rwanda. So on the side of Africa, our leaders
are restoring peace and security, which is absolutely
the pre-condition for continental progress. Unless you have
peace
and security, you cannot change the conditions in Africa
for the better.
How would you describe the role of NEPAD
in regional integration and what is the collaboration
with other supranational initiatives
and institutions like ECOWAS and the African Union?
First,
NEPAD is premised on the principle of ownership. African
leaders insist that the programme must be owned,
defined and
managed by Africans. Another principle is partnership.
In other words, although we want to own it, but we fully
realise
that
we do not have the wherewithal at present. We still have
to partner. The mode of partnership under NEPAD is first
global.
In other words, Africans will talk to OECD, the industrial
countries, and other global organisations. It is also
regional - which
means partnership from region to region. It is sub-regional,
which means cooperation with COMESA, ECOWAS and so forth.
And
it is also national/domestic, in other words, public/private
sector partnership. So the concept of partnership runs
through
all of NEPAD and the mode is very important - globally,
regionally, sub-regionally and nationally.
Finally, there is also the principle of responsibility.
African leaders realised that if they say they are going
to own NEPAD,
they must be more responsible. It is this principle of
responsibility that compelled African communities to
embrace the concept
of entrenching good governance. Political good governance,
which entails democracy, transparency, accountability,
periodic elections, independent judiciary and independent
electoral
commission. There is also economic good governance which
assures
the commitment of African leaders to better management
of their economies. Corporate good governance means NEPAD
subscribes
to the philosophy of private sector-led growth. There
must also be a sense of social responsibility. There
must be norms,
guidelines and standards that would protect the weak members
of the society. So that when we say we have the private
sector leading the economy as in the free enterprise
society of
Europe
and North America, we still advocate responsible corporate
governance.
The core principles of NEPAD
are very important to the leaders. They want to own it,
they want to be responsible
for entrenching
good governance but at the same time, we still need enhanced
partnership with the rest of the world because we do
not have
the wherewithal and need foreign direct investment. So
you can say that NEPAD represents the vision - a mental
picture
of a better future for Africa and Africans. It represents
a full-blown agenda with action plans of how to go about
it.
We do not want NEPAD to be words and no action. It must
be translated into action so that people will be able
to benefit
from it. For instance, take an area like infrastructure
development, we make the African Development Bank the
lead agency in this
area. The African Development Bank has come up with what
we call Short-term Action Plan with flagship projects.
The whole
idea is to open up Africa. If we are able to open Africa,
then we will be able to make investment inflow more attractive
towards the continent. We will even be able to encourage
Africans
to interact more among themselves and invest in their
own continent and their own countries. |
(continues)
For instance, among the flagship
projects, there is the West African Gas Pipeline, which
is the concept of piping Nigeria's surplus gas from the
Niger-Delta through Benin Republic to Togo and Ghana in
the first phase. Later, it will go up to Senegal. We also
have the plan for a West African railway which will transcend
all of the ECOWAS region from Senegal right to Nigeria.
Another flagship project is the INGA Integrator Project,
if peace and security is restored in the Great Lakes region
and in the DRC. The total potential for hydro-electric
power on the River Congo is 70,000 megawatts a day. It
is just unbelievable, there is nothing like that in the
rest of the world. If we are able to generate all this
energy on the river Congo, we will double the current electricity
capacity of all Africa. And remember it is hydro-electricity,
which is environmentally friendly with no problem about
sustainability. The plan itself is to export the surplus
through the Mediterranean into Southern Europe. The plan
is already there. The feasibility study has been done but
there must be peace and security in the Great Lakes region.
What about the implementation
of long term projects, how is NEPAD working towards the
Millennium
Development Goals (MDG)?
Let us consider the Millennium
Development Goals (MDG). The Millennium Development Goals
have become the global benchmark
for all nations to reduce poverty by 50 percent by the year
2015. It came out of the United Nations Millennium Summit
in the year 2000 and this has been adopted by NEPAD as a
goal
to work towards. By the year 2015, African countries should
be able to reduce, by half, the population of those caught
in core poverty - those living below $1 a day. But that is
a Herculean task which has been translated into 64 billion
dollars investment annually in Africa to achieve the Millennium
Development Goals. Where is that supposed to come out from?
If I give you figures, you will be amazed. All of the export
credit agencies put together in 2002 did about 60 billion
dollars export credits and only one percent came to Africa.
The question now is how are we going to attract more investment
towards Africa? This is a huge challenge. How do we make
Africa
the investors' destination? As I already said, under NEPAD
we have identified the huge need for investment inflow of
as much as 64 billion dollars per annum.
We also want to encourage capital
repatriation so that Africans will keep their own money at
home and invest it in their
own
countries. At present, not less than 40 percent of all the
private capital in Africa is invested outside of Africa.
If
you look at China, which had a 10.3 percent growth last year,
it obtains most of its investment inflow from overseas Chinese,
who left before and are coming back and investing in China.
We also face a paradox in Africa
as 70 percent of the investment into Africa today goes into
extractive industries. In Nigeria,
Mozambique, South Africa and Angola, it is all oil and gas,
and minerals-mining. We cannot unravel this paradox. Why
do
they go to extractive industries and neglect the sectors
of manufacturing, downstream petroleum and petrochemicals?
We
have to solve this puzzle.
One of the challenges
of NEPAD is capital inflow inadequacy. What should we do
first at home in each of the African countries?
First, we must save more. There are not enough saving institutions
in Africa. We save one third of what Asians save. There is
no insurance culture or unit trusts. We must save more for
the future so that we can be able to invest more. Secondly,
the public finance must improve. The quality of the public
finance; the generation, utilisation, and allocation of resources
in all ramifications must be well managed. The quality of
budget management must also improve. We must reduce budget
deficit and go to the capital market to fund deficit so that
you do not abuse Ways and Means facility. There must be fiscal
discipline on the part of government. The quality of public
finance is absolutely important in order to accelerate growth
and sustain development in African countries. This is at
the
heart of good economic governance.
In most
countries in Africa there is no strong financial and capital
market except in South Africa. For instance,
there
is a young and nascent upcoming market in Nigeria, where
we have a Stock Exchange with about 200 quoted companies,
but
we do not even have a vibrant bond market to talk about.
No Municipal bond, no State governments bonds, no Federal
government
bonds are floated. In other words, outside of South Africa,
you cannot tap substantial medium to long-term capital. So
we must begin to look at the problem, first and foremost,
from the domestic perspective. This will be in accordance
with the principle of ownership. Ownership is what we have
to do internally. To invest, we must mobilize more savings,
pension funds, etc. In Nigeria, we are trying now to reform
Pension Funds so that we can tap into household savings.
The
government also plans to introduce National Savings Certificates.
There is also the need for debt
remission. We need debt relief because the debt profile is
fiscally unsustainable. There
is a need for the heavily indebted countries to be helped.
There is also the need for market access, it is absolutely
important because if you produce and you cannot export the
products, there is no use for them. Right now, we are at
a
difficult impasse. The West is preaching to us the principles
and advantages of a free enterprise economy and globalisation.
At the same time they are the ones erecting the barriers.
Market access must just be addressed as well as capital repatriation.
It is important to improve on
the perception of Africa as an investment destination. In
other words, the risk image
of Africa must be addressed. It is being said that the return
on investment in Africa is among the highest in the world;
about 30 percent. Nonetheless, we still have the image of
a huge risk environment that everybody just tries to run
away
from. We also need the governments in industrialized countries
to help create incentives, encourage their Export Credit
Agencies
to write more credits in Africa. That is also very important
as part of what can be done externally to improve the inflow
of investment funds to Africa. So after the 2 years of NEPAD
and bringing Africa to the attention of the whole world,
one
major constraint now is capital inflow.
The other serious constraint
is capacity gap. There are huge capacity gaps, by which I
mean, the ability of indigenous
Africans to do things by themselves without relying on foreign
assistance. Under NEPAD, we say that the implementing agencies
will be the regional economic communities like ECOWAS and
COMESA as well as the national agencies. But we have found
out that these agencies have huge capacity gaps. (Ownership
without capacity is a sham) So, even if you provide the money,
they may not be able to utilise it effectively. We must build
capacity. The donor agencies are looking at how to help regional
and national agencies to be able to deliver effectively.
So,
those are the two constraints that we have observed - capacity
gap and capital inadequacy. Every country in Africa suffers
in various degrees from those constraints. The general picture
I have given to you applies to all of African countries,
so
if we all come together, sing from the same hymn book, then,
we may be able collectively to address these problems and
be able perhaps to solve them.
This is what
led to Peer Review Mechanism (APRM). It is an instrument
to ensure that African countries deliver on their
obligations under NEPAD through sharing experiences, and
peer
reviewing one another. What happened in Liberia is classic
peer review. Other African leaders approached Taylor, spoke
to him and voluntarily he agreed to leave. Peer review will
enable us to be able to track progress under NEPAD through
the process of sharing experiences. Currently, we are also
working on the mutual peer review; the framework is being
worked out between the Economic Commission for Africa and
the OECD in Europe. The idea is to monitor the promises and
commitments made by both sides and how they are delivered.
Africa will be represented by the Economic Commission for
Africa and the industrial countries by the OECD. Together,
they are developing the framework to enable both sides sit
down and access progress towards the various commitments
made
in the NEPAD document and in the Kananaskis Action Plan.
Can you tell us about your
professional background and what you have been doing before
achieving this position within
NEPAD?
For much of my years, I was a
private sector person. When I returned from the United States
where I did my private
studies
including a Masters Degree in New York University, I first
served as an Economist with the Central Bank of Nigeria.
Later,
I served as a Fellow in the Nigeria Institute of International
Affairs. After about one or two years there, I moved to the
private sector. I became the Chief Economist of United Bank
for Africa (UBA), which was one of the largest banks in Nigeria.
From there, I moved to the Unilever subsidiary, United African
Company Nigeria (UAC) where I became the Chief Economist
and
the Corporate Planning Manager. Later on, I was appointed
a Divisional Managing Director of the company. During the
period of President Babangida, I became the Minister of National
Planning. After a short return to the private sector, I came
back to Abuja where I was involved in the Vision 2010 project
for Nigeria. After this, I was appointed Ambassador, in which
position I served first in Spain and concomitantly to the
Vatican and later on, I was in Brussels as Ambassador to
Belgium
and at the same time to the European Union. During that time
I had a big challenge on my hands. I represented Nigeria
during
the negotiations of the present Cotonou agreement. When President
Obasanjo came to power, he asked me to return home to be
appointed
Commissioner in the National Planning Commission. It is in
this position he gave me the added responsibility of becoming
a member of the Steering Committee of NEPAD. I consider it
a very rare privilege to be so much involved in Africa.
What will then be your final
message not only for investors but to all the people following
the changes that are being
seen in Africa?
Africa offers an immense potential.
It is very well favoured in terms of natural endowments,
resources, fauna and flora,
but Africa is passing through a period of painful adjustment.
It is struggling through a period of implementing a serious
reform and recovery package as embodied in NEPAD. This
is a trying period for Africa. Africans, increasingly have
accepted
the reality of globalisation but it should not be a subterfuge
to bring us back into colonialism. It is a reality of the
twenty first century. African leaders have expressed collectively
that they are determined for once to ensure that they become
the architect of their own destiny and that they would
cooperate with the rest of the world to ensure that Africa
makes contribution
to global progress and uplift the standard of living of
their citizenry so that Africans can claim the 21st century.
Thank you very much.
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